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Coronavirus: Work out 80% of your employees' wages to claim through the Coronavirus Job Retention Scheme

7 June 2020


Find out how to calculate 80% of your employee's wages, National Insurance Contributions and pension contributions if you've furloughed staff due to coronavirus (COVID-19)

The Coronavirus Job Retention Scheme is changing:

From 1 July, employers can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim Coronavirus Job Retention Scheme grant for their normal hours not worked. When claiming the Coronavirus Job Retention Scheme grant for furloughed hours employers will need to report and claim for a minimum period of a week.

The scheme will close to new entrants from 30 June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three week period prior to 30 June. This means that the final date by which an employer can furlough an employee for the first time will be 10 June, in order for the current 3 week furlough period to be completed by 30 June. Employers will have until 31 July to make any claims in respect of the period to 30 June.

Further guidance on flexible furloughing and how employers should calculate claims will be published on 12 June. Find out more information on how the Coronavirus Job Retention Scheme is changing.

If you're using the Coronavirus Job Retention Scheme to claim for employees' wages, the steps you'll need to take are:

You can claim for 80% of your employees' wages (even for employees on National Minimum Wage) - up to a maximum of £2,500 per month.

You'll still need to pay employer National Insurance and pension contributions on behalf of your furloughed employees, and you can claim for these too.

You cannot claim for:

  • additional National Insurance or pension contributions you make because you choose to top up your employee's wages
  • any pension contributions you make that are above the mandatory employer contribution

You can choose to top up your employees' wages, but you do not have to. Employees must not work or provide any services for the business while furloughed, even if they receive a top-up wage.

Claims should be started from the date that the employee finishes work and starts furlough, not when the decision is made, or when they are written to confirming their furloughed status.

Use the calculator

The following calculator can currently be used to work out what you can claim for most employees who are paid either regular or variable amounts each pay period (for example, weekly or monthly).

The exceptions to this are if employees:

  • returned from statutory leave such as maternity leave in the last three months
  • get director's payments
  • have been transferred under TUPE
  • have been employed at separate times throughout the year
  • receive employer pension contributions outside of an auto-enrolment pension scheme
  • have an annual pay period

Use the Coronavirus Job Retention Scheme calculator


If you cannot use the calculator, you'll need to work out what you can claim manually using the calculation guidance or by seeking professional advice.

It's your responsibility to check that the amount you're claiming for is correct.

What to include when calculating wages

The amount you should use when calculating 80% of your employees' wages is regular payments you are obliged to make, including:

  • regular wages you pay to employees
  • non-discretionary payments for hours worked, including overtime
  • non-discretionary fees
  • non-discretionary commission payments
  • piece-rate payments

You cannot include the following when calculating wages:

  • payments made at the discretion of the employer or a client - where the employer or client was under no contractual obligation to pay, including:
    • any tips, including those distributed through troncs
    • discretionary bonuses
    • discretionary commission payments
  • non-cash payments
  • non-monetary benefits like benefits in kind (such as a company car) and salary sacrifice schemes (including pension contributions) that reduce an employees’ taxable pay

The entirety of the grant received to cover an employee's subsidised furlough pay must be paid to them in the form of money. No part of the grant should be netted off to pay for the provision of benefits or a salary sacrifice scheme.

Where the employer provides benefits to furloughed employees, including through a salary sacrifice scheme, these benefits should be in addition to the wages that must be paid under the terms of the Job Retention Scheme.

Normally, an employee cannot switch freely out of a salary sacrifice scheme unless there is a life event. HMRC agrees that COVID-19 counts as a life event that could warrant changes to salary sacrifice arrangements if the relevant employment contract is updated accordingly.

Non-discretionary payments
When you're working out if a payment is non-discretionary, only include payments which you have a contractual obligation to pay and to which your employee had an enforceable right.

When variable payments are specified in a contract and those payments are always made, then those payments may become non-discretionary. If that is the case, they should be included when calculating 80% of your employees' wages.

Non-discretionary overtime payments
If your employee has been paid variable payments due to working overtime, you can include these payments when calculating 80% of their wages as long as the overtime payments were non-discretionary.

Payments for overtime worked are non-discretionary when you are contractually obliged to pay the employee at a set and defined rate for the overtime that they have worked.

Apprenticeship Levy and Student Loans
Both the Apprenticeship Levy and Student Loans should continue to be paid as usual. Grants from the Job Retention Scheme do not cover these.

National Minimum Wage
Individuals are only entitled to the National Living Wage, National Minimum Wage or Apprentices Minimum Wage for the hours they are working or treated as working under minimum wage rules.

This means that furloughed workers who are not working can be paid the lower of 80% of their wages or £2,500 even if, based on their usual working hours, this would be below their appropriate minimum wage.

However, time spent training is treated as working time for the purposes of the minimum wage calculations and must be paid at the appropriate minimum wage, taking into account the increase in minimum wage rates from 1 April 2020. As such, employers will need to ensure that the furlough payment provides sufficient monies to cover these training hours. Where the furlough payment is less than the appropriate minimum wage entitlement for the training hours, the employer will need to pay the additional wages to ensure at least the appropriate minimum wage is paid for 100% of the training time.

Where a furloughed worker is paid close to minimum wage levels and asked to complete training courses for a substantial majority of their usual working time, employers are recommended to seek independent advice or contact the Labour Relations Agency.

If you're claiming for a member of a Limited Liability Partnership (LLP)
If a member of an LLP is treated as an employee (because of salaried members rules), you must only include payments that are either:

  • fixed
  • variable, but are varied without reference to the overall amount of the profits or losses of the LLP
  • not affected by the overall amount of the LLP's profits or losses

Holiday pay
Furloughed employees continue to accrue leave as per their employment contract.
The employer and employee can agree to vary holiday entitlement as part of the furlough agreement, however, almost all workers are entitled to 5.6 weeks of statutory paid annual leave each year which they cannot go below.

Employees can take holiday whilst on furlough. Working Time Regulations require holiday pay to be paid at the employee's normal rate of pay or, where the rate of pay varies, calculated on the basis of the average pay received by the employee in the previous 52 working weeks. Therefore, if a furloughed employee takes holiday, the employer should pay their usual holiday pay in accordance with the Working Time Regulations.

Employers will be obliged to pay additional amounts over the grant, though will have the flexibility to restrict when leave can be taken if there is a business need. This applies for both the furlough period and the recovery period.

If an employee usually works bank holidays then the employer can agree that this is included in the grant payment. If the employee usually takes the bank holiday as leave then the employer would either have to top up their usual holiday pay or give the employee a day of holiday in lieu.

During this unprecedented time, HMRC is keeping the policy on holiday pay during furlough under review.

See also COVID-19: Managing staff health, pay, leave and absence.

Employees returning from family-related statutory leave
Family-related statutory leave includes maternity leave, paternity leave, shared parental leave, adoption leave, parental bereavement leave and unpaid parental leave.

For employees on fixed pay, claims for full or part-time employees furloughed on return from family-related statutory leave should be calculated against their salary, before tax, not the pay they received whilst on family-related statutory leave. The same principles apply where the employee is returning from a period of unpaid statutory family-related leave.

Claims for those on variable pay, returning from statutory leave should be calculated using the highest of either:

  • 80% of the same month's wages from the previous year (up to a maximum of £2,500 a month)
  • 80% of the average monthly wages for the 2019 to 2020 tax year (up to a maximum of £2,500 a month)

Employees returning to work after being on sick pay
For employees on fixed pay, claims for full or part-time employees furloughed on return to work after time off sick should be calculated against their salary, before tax, not the pay they received whilst off sick.

Claims for those on variable pay, returning to work after time off sick should be calculated using the highest of either:

  • 80% of the same month's wages from the previous year (up to a maximum of £2,500 a month)
  • 80% of the average monthly wages for the 2019 to 2020 tax year (up to a maximum of £2,500 a month)

Unpaid sabbatical or unpaid leave
If your employee has been on unpaid sabbatical or unpaid leave, you'll need to use the amount they would have been paid if they were on paid leave when calculating 80% of their wages.

Work out the maximum wage amount you can claim

The maximum wage amount you can claim is £2,500 a month, or £576.92 a week, plus any National Insurance and pension contributions you can claim for.

If the length of time you're claiming for is not one week or one month, you'll need to use the daily maximum wage amounts to work out the maximum amount you can claim for each employee.

To work out the maximum amount you can claim, multiply the daily maximum wage amount by the number of days your employee is furloughed for in your claim.

Month Daily maximum wage amount
March 2020 £80.65 per day
April 2020 £83.34 per day
May 2020 £80.65 per day
June 2020 £83.34 per day


If your employee is furloughed over two calendar months, you'll need to calculate the maximum amount for each calendar month and add them together.

If you're claiming for multiple pay periods in one claim, you can calculate the total maximum using a mixture of:

  • the daily maximum wage amount
  • the weekly maximum wage amount
  • the monthly maximum wage amount

Work out 80% of your employee's usual wage

You must use these calculations to work out how much you can claim.

You can use the calculator to help you work out how much you can claim.

The way you should work out 80% of your employee's usual wages is different depending on the way they're paid. You must check what you can include as wages first.

Choose the calculation you think best fits the way your employee is paid. For example, if you pay your employee a regular salary, use the calculation for fixed pay amounts. HMRC will not decline or seek repayment of any grant based solely on the particular choice of pay calculation, as long as a reasonable choice of approach is made.

You must pay the full amount of the grant to your employee.

Where a claim covers multiple pay periods, this calculation should be done for each and then added together.

Work out 80% of wages for fixed-rate full or part-time employees on a salary
Where a claim covers multiple pay periods, this calculation should be done for each and then added together.

Claim for the 80% of the employee's wages, from their last pay period before 19 March 2020.

If you have already calculated your claim based on the employee's wages as of 28 February 2020, and this differs from their wages in their last pay period prior to 19 March 2020, you can choose to still use this calculation for your first claim.

To work out 80% of your employee's wage:

1) Start with your employee's wages, which is their last pay period before 19 March - if you're claiming for a full pay period, skip to step 4.

2) Divide by the total number of days in the pay period.

3) Multiply by the number of furlough days in the pay period.

4) Multiply by 80%.

If your employee has not been paid for a full pay period up to 19 March 2020
If your employee has not been paid for a full pay period up to 19 March 2020, you'll need to work out what their usual wages are and then calculate 80%. To do this:

1) Start with the amount they've been paid in their last pay period.

2) Divide by the number of days in their last pay period (including non-working days).

3) Multiply by the number of days that would have been in that pay period.

4) Divide by the total number of days in this pay period.

5) Multiply by the number of furlough days in this pay period.

6) Multiply by 80%.

Employees whose pay varies and were employed from 6 April 2019
If the employee has been employed continuously from the start of the 2019 to 2020 tax year, you can claim the highest of either:

  • 80% of the same month's wages from the previous year (up to a maximum of £2,500 a month)
  • 80% of the average monthly wages for the 2019 to 2020 tax year (up to a maximum of £2,500 a month)

To calculate 80% of the same month's wages from the previous year:

1) Start with the amount they earned in the same period last year.

2) Divide by the total number of days in this pay period - including non-working days.

3) Multiply by the number of furlough days in this pay period.

4) Multiply by 80%.

Find an example of claiming for the same period last year.

To work out 80% of the average monthly wages for the last tax year:

1) Start with the amount they earned in the tax year up to the day before they were furloughed.

2) Divide it by the number of days from the start of the tax year – including non-working days (up to the day before they were furloughed, or 5 April 2020 – whichever is earlier).

3) Multiply by the number of furlough days in this pay period.

4) Multiply by 80%.

Find an example of working out 80% of average monthly wages for the last tax year.

Employees whose pay varies and who started employment after 6 April 2019
If the employee started their employment after 6 April 2019, claim for 80% of their average monthly wages since they started work until the date they are furloughed, up to a maximum of £2500 per month.

To work out 80% of your employee's average monthly earnings:

1) Start with the amount they earned in the tax year up to the day before they were furloughed.

2) Divide it by the number of days they've been employed since the start of the tax year – including non-working days (up to the day before they were furloughed or 5 April 2020 – whichever is earlier).

3) Multiply by the number of furlough days in this pay period.

4) Multiply by 80%.

Every day or period after the employee commenced employment with the employer is counted in making this calculation. This includes days when no work was undertaken.

Work out how much you can claim for employer National Insurance contributions (NICs)

You can claim for Class 1 employer National Insurance Contributions you've paid on the grant that covers 80% of your employees' usual monthly wage costs. You can claim wage costs up to a maximum of £2,500 a month.

If you choose to top up your employees' wages, you cannot claim for employer National Insurance Contributions on the amount you've topped them up by.

You can use either the direct percentage method or the tables method to calculate employer National Insurance Contributions. The difference between the results will be just a few pence. The examples in this guidance use the direct percentage method.

Working out what you can claim
You should calculate employer National Insurance Contributions in the normal way.

The amount you can claim is calculated differently depending on whether the employee was furloughed for the whole pay period and whether you topped up your employee’s pay.

The grant you claim should not be more than the employer National Insurance Contributions that you are due to pay. If you have no employer National Insurance Contributions to pay, then you cannot claim for them.

The amount of employer National Insurance Contributions you claim for should not be higher than 13.8% of the grant for that employee's wages.

If you're claiming Employment Allowance
To make sure you do not claim too much from the scheme, you must adjust for the Employment Allowance.

If your employee is furloughed for the whole pay period, and you do not top up their pay
To work out how much you can claim to cover employer National Insurance contributions:

1) Start with the grant you're claiming for employee's wages.

2) Minus the relevant secondary National Insurance contributions threshold.

3) Multiply this amount by 13.8%.

If you claim the Employment Allowance, you must make sure you do not claim too much from the scheme.

Tax year National Insurance contribution thresholds
2019 to 2020 £166 per week, £719 per month or £8,632 per year
2020 to 2021 £169 per week, £732 per month or £8,788 per year

 

If your employee is not furloughed for the whole pay period or you top up their pay
If your employee is not furloughed for the whole of the pay period, or you top up your employee's pay over the amounts covered by the grant, then the following steps will help you calculate the amount of employer National Insurance Contributions you can claim for each employee:

1) Start with the employee's total pay

2) Deduct the relevant secondary National Insurance Contributions threshold

3) Multiply by 13.8%

4) Divide by the number of days in the pay period

5) Multiply by the number of furlough days in the pay period

6) Divide by the employee's total pay for the furlough days in the pay

7) Multiply by the amount of grant for employee wages

Check that the result of the calculation is not more than the maximum that can be claimed for employer NICs. The following steps will show you how to calculate the maximum employer NICs you can claim for each employee:

1) Start with the amount of grant for that employee

2) Multiply by 13.8%

You must not claim more than the maximum amount for each employee.

If you claim the Employment Allowance, you must make sure you do not claim too much from the scheme.

Adjusting your claim because of Employment Allowance
You may be eligible to claim the Employment Allowance.

Employers can use the Employment Allowance to pay less employer National Insurance Contributions until the allowance runs out or until the end of the tax year, whichever comes first.

When working out how much employer National Insurance Contributions you can claim back from the scheme, you should subtract any Employment Allowance you have used in that pay period.

If you've claimed the Employment Allowance and you do not have to pay any employer National Insurance Contributions in a pay period, you should not claim any employer National Insurance Contributions costs through the scheme.

If the amount of Employment Allowance you claim will not cover the total National Insurance Contributions due, you can claim the lower of:

  • the grant towards employer National Insurance Contributions costs that you've already calculated
  • the employer National Insurance Contributions costs that you paid, or expect to pay, across your entire payroll

If your employee is a company director
There are two methods for calculating a director's Class 1 National Insurance Contributions.

The method you use may affect how much you can claim under the scheme.

For example, if you use the annual cumulative method, and you don't have to pay employer National Insurance Contributions for the director by the time you make your claim through the scheme, then you cannot claim a grant towards employer National Insurance Contributions cost.

Work out how much you can claim for employer's pension contributions

You'll still need to pay pension contributions on behalf of your furloughed employees, and you can claim for these up to the level of the mandatory employer contribution, even if it’s not an auto-enrolment pension.

You cannot claim for any pension contributions:

You'll need to work out how much you can claim for employer's pension contributions.

1) Start with the amount you're claiming for the employee's wages.

2) Deduct the minimum amount your employee would have to earn in the claim period to qualify for employer pension contributions – this is £512 a month for periods before 5 April 2020, and £520 a month for periods after 6 April 2020.

3) Multiply by 3%.

Grants for pension contributions can be claimed up to this cap provided the employer pays the whole amount claimed to a pension scheme for the employee as an employer contribution.

How to claim

Use the online service to claim for wages

You can only claim for periods when your employee was on furlough.

By making a claim, you agree that:

  • the grant you receive can only be used to pay your employee's salary and the employer National Insurance Contributions and pension contributions you must pay in relation to the salary paid to your employee
  • you will return any grants back to HMRC immediately if you're unwilling or unable to use it to pay your employee's salary and the employer National Insurance Contributions and pension contributions

You must not make the claim if you do not accept that you can only use the money you claim for making those payments and that it must be returned to HMRC if you do not.

Deciding the length of your claim period

The start date of your first claim period is the date your first employee was furloughed. You can backdate your claim to 1 March 2020 where employees have already been furloughed from that date.

You can make your claim up to 14 days before your claim period end date. You can choose to match your claim period to the dates you run your payroll. Any claim period must contain all of the furloughed days that the claim relates to.

You must include all employees in one claim, even if they’re paid at different times. You cannot make 2 claims for the same period of time.

If you claim again, your subsequent claim cannot overlap with your first claim. Where employees have been furloughed continuously, the claim periods must follow on from each other with no gaps in between the dates.

You can claim before, during or after you run your payroll and do not have to wait until the end of a claim period to make your next claim. But it must not overlap with the previous claim period.

Payments will be made 6 working days after you make your claim.

If you make an error when claiming
If you have made an error in a claim that has resulted in an over-claimed amount, you must pay this back to HMRC.

You can now tell HMRC about an over-claimed amount as part of your next claim. You will be asked when making your claim whether you need to adjust the amount down to take account of a previous error. Your new claim amount will be reduced to reflect this. You don’t need to take further action but should keep a record of this adjustment for six years.

If you have made an error in a claim and do not plan to submit further claims, HMRC is working on a process that will allow customers to let them know about your error and pay back any amounts that you have over-claimed. We will update guidance when this is available.

Contacting HMRC
HMRC are receiving very high numbers of calls. Contacting HMRC unnecessarily puts their essential public services at risk during these challenging times.

Use HMRC's digital assistant to find more information about the coronavirus support schemes.

You can also contact HMRC if you cannot get the help you need online.


First published 19 April 2020